Smoke and mirrors as US arms suppliers meet with Taiwanese

The US is wary of upsetting China, but talks are underway on defense deals

Lockheed Martin, Raytheon, Boeing and other leading US defense contractors sat around a table with their Taiwanese counterparts in Taipei on Thursday, but there was no military hardware on show.

Wary of provoking China, delegates at the Taiwan-US Defense Business Forum in the southern port city of Kaohsiung wanted it known that they were talking, not dealing: the theme was “shipbuilding, cybersecurity and aerospace cooperation”. The forum was held with the mainstream US-Taiwan Business Council.

Yet there was no doubting the real business at hand. Taiwan is looking to beef up its coastal defenses against incursions from China and the American arms developers, manufacturers and dealers are making a concerted pitch to draw the island into their supply chains. Set up in 2002, the forum has been held in the US until this year, but will now meet twice a year in both countries, which China will have noted.

The Beijing-controlled Global Times claimed on Thursday that Taiwan planned to spend NT$600 billion (US$20.11 billion) in a “futile” bid to remain independent from China. “No matter how Taiwan arms its army, they will always be outnumbered by the People’s Liberation Army,” military expert Song Zhongping was quoted as saying in the report. “So I believe this effort is useless and has no value at all.”

US officials have been careful to avoid a direct stand-off with China over Taiwan, but Business Council president Rupert Hammond-Chambers told Taiwan’s Central News Agency that he had high hopes Donald Trump would commit to assisting the island with its defense, adding that there were “good people” in his administration.

That may already be happening. According to Democratic Progressive Party Legislator Liu Shyh-fang, the government of Tsai Ing-wen has ambitious plans that go far beyond its stated intention to shell out US$15 billion for naval upgrades by 2040, which will include new submarines, frigates, minelayers and amphibious transport docks.

Defense contractors from Taiwan and the US at Thursday’s forum. Photo: Handout

Liu says that destroyers, landing helicopter docks, marine special operations craft and other ships are also in the pipeline, with Taiwanese firms and US shipbuilders and suppliers set to benefit.

Lockheed Martin’s business development director for Asia-Pacific, Robert Laing, reportedly told the forum that the US Navy is renewing its interest in guided-missile frigates and anti-submarine warfare as the Trump administration shifts its defense priorities from fending off terrorism to dealing with perceived security threats.

Noting that these matched Taiwan’s needs and expertise, Laing said his company would explore ways to co-develop frigates with an anti-aircraft warfare capability with Taiwanese shipbuilders, the Taipei-based Liberty Times reported.

The remarks coincide with reports that Taiwan is finalizing the specifications for a new destroyer designed around the Aegis naval combat system. Lockheed Martin is a major supplier and contractor of the system, which uses computers and radar technology to track and guide weapons and then destroy enemy targets.

In March the US Department of Defense also granted marketing licenses and technical assistance agreements so that American suppliers could negotiate with their Taiwan counterparts on the transfer of submarine technologies, offering further evidence that there will be joint design and production of next-generation vessels.

In another move sure to upset China, the Pentagon will propose by September that US warships start making Taiwan port calls, with reciprocal visits by Taiwanese vessels to Hawaii, Guam and other US ports. The legal framework will be the National Defense Authorization Act for 2018.

Beijing’s constant infiltration of Taiwanese waters and intense espionage will be one concern for potential foreign defense industry partners, as is the island’s weak protection of intellectual property. US delegates at the forum also questioned the fact that some Taiwanese companies have dealings with China or maintain subsidiaries there.

They urged these companies to properly firewall their organizations, noting that US industrial entities must conduct due diligence to ensure their sensitive technologies and secrets are properly handled.